Numericals:
Assets
Net Fixed Assets - 800
Inventories - 300
Preliminary Expenses - 100
Receivables - 150
Investment In Govt. Secu - 50
Total Assets - 1400
Liabilities
Equity Capital - 200
Preference Capital - 100
Term Loan - 600
Bank C/C - 400
Sundry Creditors - 100
Total Liabilities – 1400
1. Debt Equity Ratio = ?
a. 1:1
b. 1:2
c. 2:1
d. 2:3
Ans - c
Explanation :
600 / (200+100) = 2 : 1
2. Tangible Net Worth = ?
a. 100
b. 200
c. 300
d. 400
Ans - b
Explanation :
Only equity Capital i.e. = 200
3. Total Liabilities to Tangible Net Worth Ratio = ?
a. 7:2
b. 11:2
c. 13:2
d. 15:2
Ans - b
Explanation :
Total Outside Liabilities / Total Tangible Net Worth : (600+400+100) / 200 = 11 : 2
4. Current Ratio = ?
a. 1:1
b. 1:2
c. 2:1
d. 3:1
Ans - a
Explanation :
(300 + 150 + 50 ) / (400 + 100 ) = 1 : 1
Q.2
Assets
Net Fixed Assets - 265
Cash - 1
Receivables - 125
Stocks - 128
Prepaid Expenses - 1
Intangible Assets - 30
Total - 550
Liabilities
Capital + Reserves - 355
P & L Credit Balance - 7
Loan From S F C - 100
Bank Overdraft - 38
Creditors - 26
Provision of Tax - 9
Proposed Dividend - 15
Total - 550
1. Current Ratio = ?
= (1+125 +128+1) / (38+26+9+15)
= 255/88
= 2.89 : 1
2. Quick Ratio = ?
(125+1)/88
= 1.43 : 11
3. Debt Equity Ratio = ?
= LTL / Tangible NW
= 100 / (362 – 30)
= 100 / 332
= 0.30 : 1
4. Proprietary Ratio = ?
= (T NW / Tangible Assets) x 100
= [(362 - 30 ) / (550 – 30)] x 100
= (332 / 520) x 100
= 64%
5. Net Working Capital = ?
= CA - CL
= 255 - 88
= 167
6. If Net Sales is Rs.15 Lac, then What would be the Stock Turnover Ratio in Times ?
= Net Sales / Average Inventories/Stock
= 1500 / 128
= 12 times approximately
7. What is the Debtors Velocity Ratio if the sales are Rs. 15 Lac?
= (Average Debtors / Net Sales) x 12
= (125 / 1500) x 12
= 1 month
8. What is the Creditors Velocity Ratio if Purchases are Rs.10.5 Lac?
= (Average Creditors / Purchases ) x 12
= (26 / 1050) x 12
= 0.3 months
.............................................
Q.3 Current Ratio of a firm is 1 : 1. What will be the Net Working Capital ?
a. 0
b. 1
c. 100
d. 200
Ans - a
Explanation :
It suggest that the Current Assets is equal to Current Liabilities hence the NWC would be
0
(since NWC = C.A - C.L)
.............................................
Q.4 Suppose Current Ratio is 4 : 1. NWC is Rs.30,000/-. What is the amount of Current
Assets ?
a. 10000
b. 30000
c. 40000
d. 50000
Ans - c
Explanation :
Let Current Liabilities = a
4a - 1a = 30,000
a = 10,000 i.e. Current Liabilities is Rs.10,000
Hence Current Assets would be
4a = 4 x 10,000 = Rs.40,000/-
.............................................
Q.5 The amount of Term Loan installment is Rs.10000/ per month, monthly average interest
on TL is Rs.5000/-. If the amount of Depreciation is Rs.30,000/- p.a. and PAT is
Rs.2,70,000/-. What would be the DSCR ?
a. 1
b. 1.5
c. 2
d. 2.5
Ans - C
Explanation :
DSCR = (PAT + Depr + Annual Intt.) / Annual Intt + Annual Installment
= (270000 + 30000 + 60000 ) / 60000 + 12000
= 360000 / 180000
= 2
.............................................
Q. 6 A Company has Net Worth of Rs.5 Lac, Term Liabilities of Rs.10 Lac. Fixed Assets worth
RS.16 Lac and Current Assets are Rs.25 Lac. There is no intangible Assets or other Non
Current Assets. Calculate its Net Working Capital.
a. 1 lac
b. 2 lac
c. - 1 lac
d. - 2 lac
Ans - c
Explanation :
Total Assets = 16 + 25 = Rs. 41 Lac
Total Liabilities = NW + LTL + CL = 5 + 10 + CL = 41 Lac
Current Liabilities = 41 – 15 = 26 Lac
Therefore Net Working Capital = CA – CL = 25 – 26 = (-) 1 Lac
.............................................
Q. 7 Merchandise costs - Rs. 250000, Gross Profit - Rs. 23000, Net Profit - Rs. 15000. Find
the amount of sales.
a. 227000
b. 235000
c. 265000
d. 273000
Ans - d
Explanation :
Amount of sales = Merchandise costs + Gross Profit
= 250000 + 23000
= 273000
.............................................
Q.8 Total Liabilities of a firm is Rs.100 Lac and Current Ratio is 1.5 : 1. If Fixed Assets and
Other Non Current Assets are to the tune of Rs. 70 Lac and Debt Equity Ratio being 3 :
1. What would be the Long Term Liabilities?
a. 40 Lacs
b. 60 Lacs
c. 80 Lacs
d. 100 Lacs
Ans - b
Explanation :
Total Assets = Total Liabilities = 100 Lac
Current Asset = Total Assets - Non Current Assets
= Rs. 100 L - Rs. 70 L
= Rs. 30 L
If the Current Ratio is 1.5 : 1
then Current Liabilities works out to be Rs. 20 Lac.
That means, Net Worth + Long Term Liabilities = Rs. 80 Lacs.
If the Debt Equity Ratio is 3 : 1,
then Debt works out to be Rs. 60 Lacs and equity Rs. 20 Lacs.
Therefore the Long Term Liabilities would be Rs.60 Lac.
.............................................
Q.9 Current Ratio = 1.2 : 1.
Total of balance sheet being Rs.22 Lac.
The amount of Fixed Assets + Non Current Assets is Rs. 10 Lac.
What would be the Current Liabilities?
a. 10 Lacs
b. b. 12 Lacs
c. 16 Lacs
d. 22 Lacs
Ans - a
Explanation :
Total Assets is Rs.22 Lac.
Fixed Assets + Non Current Assets is Rs. 10 Lac
Then Current Assets = 22 – 10 = Rs. 12 Lac.
Current Ratio = 1.2 : 1
Current Liabilities = Rs. 10 Lac
.............................................
Q.10 M/s Raj&co's balance sheet included the following accounts:
Cash: 10,000
Accounts Receivable: 5,000
Inventory: 5,000
Stock Investments: 1,000
Prepaid taxes: 500
Current Liabilities: 15,000
Find the Quick Ratio
Quick Ratio = Cash + Cash Equivalents + Short Term Investments + Marketable
Securities + Accounts Receivable) / Current Liabilities
= (10000+5000+1000) / 15000
= 16000 / 15000
= 1.07
.................................
Q.11 M/s Raj&co's balance sheet included the following accounts:
Inventory : 5,000
Prepaid taxes : 500
Total Current Assets : 21,500
Current Liabilities : 15,000
Find the Quick Ratio
Quick Ratio = (Current assets – Inventory - Advances - Prepayments Current Liabilities) /
Current Liabilities
= (21500 - 5000 - 500) / 15000
= 16000 / 15000
= 1.07
.................................
Q.12 XYZ Pvt Ltd has the following assets and liabilities as on 31st March 2015 (in Lakhs) :
Non Current Assets
Goodwill 75
Fixed Assets 75
Current Assets
Cash in hand 25
Cash in bank 50
Short term investments 45
Inventory 25
Receivable 100
Current Liabilities
Trade payables 100
Income tax payables 60
Non Current Liabilities
Bank Loan 50
Deferred tax payable 25
Find the Quick Ratio
Quick Ratio = (Cash in hand + Cash at Bank + Receivables + Marketable Securities) /
Current Liabilities
= (25+50+45+100) / 160
= 220 / 160
= 1.375
.................................
Q.14 GHI Ltd. manufacturers two products :Product G and Product H. The Variable cost of the manufacture is as
follows:
Product G Product H
Direct Material 3 10
Direct Labour (Rs.6 per hour) 18 12
Variable Overhead 4 4
Product G sells for Rs.40 and Product H at Rs.30. During the month of January, the Company is having
only 21000 of direct labour. The maximum production capacity of Product G is 5000 units and Product H is
10000 units.
From the above facts, answer the following:
I. The contribution from Product G and H together is-----
a) Rs.32
b) Rs.19
c) Rs.27
d) Rs.40
II. The contribution per labour hour from Product H is-----
e) Rs. 4
f) Rs. 2
g) Rs. 3
h) Rs. 5
III. The contribution per labour hour from Product G is-----
a) Rs.2
b) Rs.5
c) Rs.15
d) Rs.3
Q.15 Read the following and answer
Cost / unit
Raw material 50
Direct labour 20
Overheads 40
Total cost 110
No. of units 10,000
No. of units
Sold on credit 8000
Average raw material in stock : 1 month
Average work in progress : ½ month
Average finished goods in stock : ½ month
Credit by supplier : 1 month
Credit to debtor : 2 months
Take 1 year = 12 months
1) Investment of working capital in raw material inventory is
(a) 41666
(b) 50000
(c) 33333
(d) 10000
2) Investment in working capital for finished goods is
a) 45833
b) 49090
c) 56453
d) 50000
3)current assets in respect of debtors
a) 174541
b) 146666
c) 152500
d) 154326
Q.16 A company with equity of Rs. 10 crore earns PBIDT of Rs. 40 crore. It incurs
interest of Rs.5 crore, depreciation of Rs. 5 crore and pays tax of Rs. 10 crore. It
has reserves of Rs. 30 crore (Excluding current years profits) and long term debt
of Rs. 50 crore. It pays 100% dividend and transfers remaining profit to reserves.
Its share of Rs. 10 face value is quoted at price of Rs. 200. Find the following :
(i) Book value of share after current year's profit transferred to reserves.
Book Value = Equity + Reserves + Current year’s (PAT – Div)
= 10 + 30 + (20 – 10) = Rs..50
(ii) Earning per share
40 – ( 5+5+10)
EPS = PAT / Equity = ------------------ x 10
10
20
--- x 10 = Rs.20
23
10
(iii) Return on net worth
PAT x 100 20
40% Return on net worth = ------------ = ------- x 100 = 40%
NW 50
(iv) Debt-equity ratio
50
1:1 Debt equity ratio = ------ = 1:1
50
(v) P/E ratio
10 M.P. = EPs x PE
200 = 20 x PE
PE = 10
(vi) Payout ratio
50%
Dividend 10
----------- = ---- = 50%
PAT 20
Q.17 Following information is given by a company from its books of accounts as on
March 31, 2018:
Particulars Rs.
Inventory 1,00,000
Total Current Assets 1,60,000
Shareholders’ funds 4,00,000
13% Debentures 3,00,000
Current liabilities 1,00,000
Net Profit Before Tax 3,51,000
Cost of revenue from operations 5,00,000
Calculate:
i) Current Ratio
ii) Liquid Ratio
iii) Debt Equity Ratio
iv) Interest Coverage Ratio
v) Inventory Turnover Ratio
Solution:
i) Current Ratio =
Current Assets
Current Liabilities
=
Rs. 1,60,000
Rs. 1,00,000
= 1.6
ii) Liquid Assets = Current assets – Inventory
= Rs. 1,60,000 – Rs. 1,00,000
= Rs. 60,000
Liquid Ratio =
Liquid Assets
Current Liabilities
=
Rs. 60,000
Rs. 1,00,000
= 0.6 : 1
iii) Debt-Equity Ratio =
Long-term Debts
Shareholders' Funds
=
Rs. 3,00,000
Rs. 4,00,000
= 0.75 : 1
iv) Net Profit before Interest = Net Profit before Tax + Interest on Long
& Tax term Debts
= Rs. 3,51,000 + (13% of Rs. 3,00,000)
= Rs. 3,51,000 + Rs. 39,000 = Rs. 3,90,000
Interest Coverage Ratio =
Net Profit before Interest & Tax
Interest on Long Term Debts
=
Rs. 3,90,000
Rs. 39,000
= 10 times
v) Inventory Turnover Ratio =
Cost of Revenue from Operations
Average Inventory
=
Rs. 5,00,000
Rs. 1,00,000
= 5 times
Q.18 Gross profit ratio of a company was 25%. Its credit revenue from operations was
Rs. 20,00,000 and its cash revenue from operations was 10% of the total revenue
from operations. If the indirect expenses of the company were Rs. 50,000,
calculate its net profit ratio.
Solution:
Cash Revenue from Operations = Rs.20,00,000 × 10/90
= Rs.2,22,222
Hence, total Revenue from Operations are = Rs.22,22,222
Gross profit = 0.25 × 22,22,222 = Rs. 5,55,555
Net profit = Rs.5,55,555 – 50,000
= Rs.5,05,555
Net profit ratio = Net profit/Revenue from Operations
× 100
= Rs.5,05,555/Rs.22,22,222 × 100
= 22.75%.
Q.19 From the following details, calculate Return on Investment:
Share Capital : Equity (Rs.10) Rs. 4,00,000 Current Liabilities Rs. 1,00,000
12% Preference Rs. 1,00,000 Fixed Assets Rs. 9,50,000
General Reserve Rs. 1,84,000 Current Assets Rs. 2,34,000
10% Debentures Rs. 4,00,000
Also calculate Return on Shareholders’ Funds, EPS, Book value per share
and P/E ratio if the market price of the share is Rs. 34 and the net profit after tax
was Rs. 1,50,000, and the tax had amounted to Rs. 50,000.
Solution:
Profit before interest and tax = Rs. 1,50,000 + Debenture interest + Tax
= Rs. 1,50,000 + Rs. 40,000 + Rs. 50,000
= Rs.2,40,000
Capital Employed = Equity Share Capital + Preference Share
Capital + Reserves + Debentures
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 1,84,000
+ Rs. 4,00,000 = Rs. 10,84,000
Return on Investment = Profit before Interest and Tax/
Capital Employed × 100
= Rs. 2,40,000/Rs. 10,84,000 × 100
= 22.14%
Shareholders’ Fund = Equity Share Capital + Preference Share Capital
+ General Reserve
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 1,84,000
= Rs. 6,84,000
Return on Shareholders’ Funds = Profit after tax/shareholders’ Funds × 100
= Rs. 1,50,000/Rs. 6,84,000 × 100
= 21.93%
EPS = Profit available for Equity Shareholders/
Number of Equity Shares
= Rs. 1,38,000/ 40,000 = Rs. 3.45
Preference Share Dividend = Rate of Dividend × Prefence Share Capital
= 12% of Rs. 1,00,000
= Rs. 12,000
Profit available to equity = Profit after Tax – Preference dividend on
Shareholders preference shares
where, Dividend on Prefrence = Rate of Dividend × Preference Share Capital
shares = 12% of Rs. 1,00,000
= Rs.12,000
= Rs. 1,50,000 – Rs. 12,000 = Rs. 1,38,000
P/E Ratio = Market price of a share/ Earnings per share
= 34/3.45
= 9.86 Times
=
Rs. 4,00,000
Rs.10
= Rs. 40,000
Book Value per share = Equity Shareholders’ fund/No. of
equity shares
where, Number of Equity Shares =
Equity share capital
Face value per share
Hence, Book value per share = Rs. 5,84,000/40,000 shares = Rs. 14.60
Some more problems for Practice::
Current Ratio of a firm is 1 : 1. What will be the Net Working Capital ?
a. 0
b. 1
c. 100
d. 200
Ans - a
Explanation :
It suggest that the Current Assets is equal to Current Liabilities hence the NWC would be
0
(since NWC = C.A - C.L)
.............................................
Suppose Current Ratio is 4 : 1. NWC is Rs.30,000/-. What is the amount of Current
Assets ?
a. 10000
b. 30000
c. 40000
d. 50000
Ans - c
Explanation :
Let Current Liabilities = a
4a - 1a = 30,000
a = 10,000 i.e. Current Liabilities is Rs.10,000
Hence Current Assets would be
4a = 4 x 10,000 = Rs.40,000/-
.............................................
The amount of Term Loan installment is Rs.10000/ per month, monthly average interest
on TL is Rs.5000/-. If the amount of Depreciation is Rs.30,000/- p.a. and PAT is
Rs.2,70,000/-. What would be the DSCR ?
a. 1
b. 1.5
c. 2
d. 2.5
Ans - C
Explanation :
DSCR = (PAT + Depr + Annual Intt.) / Annual Intt + Annual Installment
= (270000 + 30000 + 60000 ) / 60000 + 120000
= 360000 / 180000
= 2
.............................................
A Company has Net Worth of Rs.5 Lac, Term Liabilities of Rs.10 Lac. Fixed Assets worth
RS.16 Lac and Current Assets are Rs.25 Lac. There is no intangible Assets or other Non
Current Assets. Calculate its Net Working Capital.
a. 1 lac
b. 2 lac
c. - 1 lac
a. - 2 lac
Ans - c
Explanation :
Total Assets = 16 + 25 = Rs. 41 Lac
Total Liabilities = NW + LTL + CL = 5 + 10 + CL = 41 Lac
Current Liabilities = 41 – 15 = 26 Lac
Therefore Net Working Capital = CA – CL = 25 – 26 = (-) 1 Lac
.............................................
Merchandise costs - Rs. 250000, Gross Profit - Rs. 23000, Net Profit - Rs. 15000. Find
the amount of sales.
a. 227000
b. 235000
c. 265000
d. 273000
Ans - d
Explanation :
Amount of sales = Merchandise costs + Gross Profit
= 250000 + 23000
= 273000
.............................................
Total Liabilities of a firm is Rs.100 Lac and Current Ratio is 1.5 : 1. If Fixed Assets and
Other Non Current Assets are to the tune of Rs. 70 Lac and Debt Equity Ratio being 3 :
1. What would be the Long Term Liabilities?
a. 40 Lacs
b. 60 Lacs
c. 80 Lacs
d. 100 Lacs
Ans - b
Explanation :
Total Assets = Total Liabilities = 100 Lac
Current Asset = Total Assets - Non Current Assets
= Rs. 100 L - Rs. 70 L
= Rs. 30 L
If the Current Ratio is 1.5 : 1
then Current Liabilities works out to be Rs. 20 Lac.
That means, Net Worth + Long Term Liabilities = Rs. 80 Lacs.
If the Debt Equity Ratio is 3 : 1,
then Debt works out to be Rs. 60 Lacs and equity Rs. 20 Lacs.
Therefore the Long Term Liabilities would be Rs.60 Lac.
.............................................
Current Ratio = 1.2 : 1.
Total of balance sheet being Rs.22 Lac.
The amount of Fixed Assets + Non Current Assets is Rs. 10 Lac.
What would be the Current Liabilities?
a. 10 Lacs
b.b. 12 Lacs
c. 16 Lacs
d. 22 Lacs
Ans - a
Explanation :
Total Assets is Rs.22 Lac.
Fixed Assets + Non Current Assets is Rs. 10 Lac
Then Current Assets = 22 – 10 = Rs. 12 Lac.
Current Ratio = 1.2 : 1
Current Liabilities = Rs. 10 Lac
..........................................
A company has 1,00,000 of bank lines of credit and a 5,00,000 mortgage on its property. The shareholders of the
company have invested 12,00,000. Calculate the debt to equity ratio.
DER = TL / Total Equity
= (100000+500000) / 1 200000
= 600000 / 1200000
= 0.5
.................................
A company has total assets at 1,50,000 and its total liabilities are 50,000. Based on the accounting equation, we can
assume the total equity is 1,00,000. Find the Equity Ratio.
ER = Total Equity / TA
= 100000 / 150000
= 0.67
.................................
A company has total assets at 1,50,000 and its total liabilities are 50,000. Based on the accounting equation, we can
assume the total equity is 1,00,000. Find the Debt Ratio.
DR = TL / TA
= 50000 / 150 000
= 0.33
.................................
A company has 1,00,000 of bank lines of credit and a 5,00,000 mortgage on its property. The shareholders of the
company have invested 12,00,000. Calculate the debt to equity ratio.
a. 0.25
b. 0.5
c. 0.75
d. 1
Ans - b
Solution :
DER = TL / Total Equity
= (100000+500000) / 1 200000
= 600000 / 1200000
= 0.5
......... ........................
A company has total assets at 1,50,000 and its total liabilities are 50,000. Based on the accounting equation, we can
assume the total equity is 1,00,000. Find the Equity Ratio.
a. 0.33
b. 0.5
c. 0.67
d. 0.75
Ans – c
Solution :
ER = Tota l Equity / TA
= 100000 / 150000
= 0.67
.......... ...................................
In balance sheet, amount of total assets is Rs 10 lac, current liabilities Rs 5 lac and capital and reserves Rs 2 lac. What
is the debt-equity ratio?
a. 1:1
b. 1.5: 1
c. 1.75:1
d. 2:1
Ans - b
Let me Explain
As per Balance sheet rule Total assets = Total liabilities
Since total assets here is Rs 10 lac hence total liabilities must be 10 lac.
Now Long term debt = 10-(5+2) = 3 lac and capital + reserve(TNW i.e tangible net worth) = 2 lac
Since DER = TL/TNW or debt/equity or TL/equity hence 3/2 = 1.5 : 1
.............................................
DER is 3:1, the amount of total assets Rs 20 lac, current ratio is 1.5:1 and owned funds Rs 3 lac. What is amount of
current assets?
a. 3 lac
b. 5 lac
c. 12 lac
d. 15 lac
Ans - c
Let me Explain
Owned fund = equity = 3 lac
Since DER = 3:1
i.e Debt : equity = 3:1
Hence Debt = 9 lac
(if we consider debt and equity as long term liabilities then term liability works out to 12(9+3 lac)
Here total assets is 20 lac
Now as per balance sheet equation total Assets = total liabilities
Hence here total liabilities will also be 20 lac.
Now as the term liabilities is Rs 12 lac, curren t liabilities will be Rs 8 lac (20-12=8)
CR=1.5:1, so
1.5:1=CA:8
i.e CA= 1.5× 8=12 lac
................................ .............
In balance sheet, amount of total assets is Rs 20 lac, current liabilities Rs 5 lac and capital and reserves Rs 2 lac. What
is the debt-equity ratio?
a. 1:1
b. 1.5: 1
c. 1.75:1
d. 2:1
Ans - d
Let me Explain
As per Balance sheet rule Total assets = Total liabilities
Since total assets here is Rs 20 lac hence total liabilities must be 20 lac.
Now Long term debt = 20-(5+5) = 10 lac and capital + reserve(TNW i.e tangible net worth) = 5 lac
Since DER = TL/TNW or debt/equity or TL/equity hence 10/5 = 2 : 1
.............................................
DER is 2:1, the amount of total assets Rs 40 lac, current ratio is 1:1 and owned funds Rs 10 lac. What is amount of
current assets?
a. 8 lac
b. 10 la c
c. 12 lac
d. 15 lac
Ans - b
Let me Explain
Owned fund = equity = 10 lac
Since DER = 2:1
i.e Debt : equity = 2:1
Hence Debt = 20 lac
(if we consider debt a nd equity as long term liabilities then term liability works out to 30 (20+10 lac)
Here total assets is 40 lac
Now as per balance sheet equation total Assets = total liabilities
Hence here total liabilities will also be 40 lac.
Now as the term liabilities is Rs 30 lac, curren t liabilities will be Rs 10 lac (40-30=10)
CR=1:1, so
1:1=CA:10
i.e CA= 1× 10=10 lac
The amount of term loan installment is Rs 10000/- per month, monthly average interest on TL is Rs 5000/-. If the
amount of depreciation is Rs 30000/- p.a and PAT is Rs 270000/-. What would be the DSCR?
a. 1.75
b. 2
c. 1. 65
d. 1.33
Ans - b
Let me Explain
Since DSCR = (interest + PAT + Depriciation) / (interest + instalment of TL)
Hence (5000×12 + 270000 + 30000)/(5000×12 + 10000×12)
i.e 360000/18000
i.e 2
....... ......................................
The amount of term loan instalment is Rs 15000/- per month, Monthly average interest on TL is Rs 10000/-. If the
amount of depreciation is Rs 30000/- p.a and PAT is Rs 300000/-. What would be the DSCR?
a. 1
b. 1 .5
c. 2
d. 2 .5
Ans - c
Let me Explain
Since DSCR = (interest + PAT + Depriciation) / ( interest + instalment of TL )
= (10000×12 + 300000 + 30000)/(10000×12 + 15000×12)
= (120000 + 330000) / (120000 + 180000)
= 450000/300000
= 1.5
......... ....................................
The amount of term loan installment is Rs 15000/- per month, monthly average interest on TL is Rs 7500/-. If the
amount of depreciation is Rs 100000/- p.a and PAT is Rs 350000/-. What would be the DSCR?
a. 1.75
b. 2
c. 1. 65
d. 1.33
Ans - b
Let me Explain
Since DSCR = (interest + PAT + Depriciation) / (interest + instalment of TL)
DSCR = (7500×12 + 350000 + 100000)/(7500×12 + 15000×12)
= (90000 + 350000 + 100000) / (90000 + 180000)
= 540000 / 270000
= 2
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